Yahoo is spending $1.16 billion to buy back 40 million shares owned by New York-based activist hedge fund Third Point.
The Associated Press reported that Yahoo is paying Third Point nearly $30 per share, which is more than double the hedge fund paid when it began buying shares in 2011. Third Point and its founder and chief executive Dan Loeb will see a pretax gain of approximately $610 million from the sale.
The hedge fund will retain a less than 2% stake in Yahoo after the buyback.
Third Point founder and chief executive Dan Loeb is also leaving Yahoo’s board amidst the transaction.
Third Point, which is largest Yahoo’s third largest stakeholder, has about $7.9 billion in assets under management.